Iraq's Oil Minister Claims It Can Be Globe's Largest Oil Producer

Iraq's oil minister believes his nation can produce 10-12 million barrels of oil a day sometime in the next 5 to 10 years. That would be 5 times the 2.2 million barrels Iraq is producing at present. Those 10-12 million barrels represent more oil than either of the two largest oil producers today-- Russia and Saudi Arabia.-- can accomplish.

Iraq sits on estimated oil reserves of 143 billion barrels, the 3rd largest oil reserves in the world. But, development of these valuable resources have been prevented by years of economic sanctions, underinvestment, and a long-lasting bloody war.

This prognosis would have global ramifications for the price of oil, for the rate of inflation, and potential profits for the oil producers like the Chinese and French who may have the inside track. It would also make up in part for the blow to deep sea drilling after the BP blowout in the Gulf of Mexico or the fallout from the partial nuclear meltdown in Japan.

This bold message was given to a small group of Americans in a trip organized by the Council on Foreign Relations, according to Robert Rosenkrantz, a 67 year old financier, CEO of Delphi Financial Group and founder of the Intelligence Squared debate series that can be seen on television.

In a private note to friends Rosenkrantz wrote "I don't believe this (10-12 million barrels) is credible, but neither is it impossible, and if achieved would make Iraq the world's largest oil producer and would by itself satisfy around half of projected global increases in demand."

Rosenkrantz doesn't see the opportunity for a huge profit gain for oil majors like Exxon Mobil, British Petroleum, Shell or Chevron. That's because Iraq is "asking oil majors to provide technical services for rock bottom fees, but offering minimal incentives to provide the $100 billion plus of capital that will be required."

Rosenkrantz believes the Chinese and the French oil giants will have the inside track.(Elf Acquitaine had the inside track to Saddam Hussein's Iraq) But, he disdains the bullish aspects of Iraq's additional oil reserves, since "Iraq remains one of the most socialist countries in the world... The Iraqui government like socialist governments everywhere, does not begin to understand market incentives."